Commenting on the publication today (22.11.06) by the Bank of England of the Minutes of the Monetary Policy Committee (MPC) meeting held on 8 & 9 November 2006, David Kern, Economic Adviser to the BCC, said:
"Today's MPC Minutes, and the welcome news that 2 MPC members voted against the increase in Bank Rate announced on 9 November, support our assessment that the arguments for the increase in interest rates were finely balanced, and were certainly not conclusive.
"We have made it clear that we understood the reasons for the MPC's decision earlier in November. In particular, we appreciate the need to forestall and resist potential wage pressures in the next round. But, as one of the MPC's members pointed out, one cannot ignore the downside risks to demand and inflation.
"There is no justification for a further early increase in UK interest rates. To avoid causing serious long-term damage to the economy, and to underpin confidence, it is critically important for the MPC to reassure business that further early increases in interest rates will not be contemplated."